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Combination Creates Comprehensive Source of Prescription Information for Medicaid and Managed Care Markets

FAIRFIELD, CT, March 3, 2003 – IMS Health (NYSE: RX) today announced that its U.S. business unit has acquired Data Niche Associates Inc. (DNA), a Northfield, Ill.-based firm specializing in Medicaid and managed care rebate validation services.  Together, the two companies will offer comprehensive information and analysis of Medicaid and managed care markets, enabling pharmaceutical manufacturers to validate rebate claims and optimize performance within those rapidly growing healthcare delivery channels.

IMS is the world’s leading provider of information solutions and consulting services to the pharmaceutical and healthcare industries.  DNA provides data and services to help pharmaceutical companies reconcile prescription rebates for Medicaid and managed care claims.  Financial terms of the transaction were not disclosed.

“State-administered Medicaid programs and private managed care organizations represent substantial and rapidly growing segments of the U.S. pharmaceutical market,” said Gary Noon, president of IMS U.S.  “Objective, detailed information about prescription activity and trends within those distribution channels will give our clients a better understanding of how Medicaid and managed care strategies and rebates impact their business results.”

DNA, which will operate as an IMS business unit, pioneered the use of prescription-level data to provide services that validate government-mandated rebates paid by pharmaceutical suppliers.  Anonymized details of more than 350 million prescriptions from 48 state Medicaid programs, as well as more than 200 million claims from major managed care organizations nationwide, are compiled and standardized annually by DNA.  IMS and DNA will work together to further develop managed care validation services.

“The combined expertise and resources of IMS and DNA will deliver validation services and integrated solutions that offer the most accurate, detailed view of the Medicaid and managed care marketplace available,” said Bob Shah, DNA president.  “Our goal is to provide pharmaceutical clients with the tools to operate more efficiently and to better understand these growing market segments.”

Approximately 60 percent of the U.S. population receives healthcare services through managed care plans, which spent in excess of $100 billion acquiring pharmaceutical products in 2002.  Medicaid prescription drug expenditures grew to $32.2 billion in 2002, representing more than 18 percent of total prescription sales in the U.S.  

William Blair & Company served as financial advisor to DNA on this transaction. 

About IMS

Operating in more than 100 countries, IMS is the world's leading provider of information solutions to the pharmaceutical and healthcare industries. With $1.4 billion in 2002 revenue and nearly 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients’ day-to-day operations, including marketing effectiveness solutions for prescription and over-the-counter pharmaceutical products; sales optimization solutions to increase pharmaceutical sales force productivity; and consulting and customized services that turn information into actionable insights.

About Data Niche Associates

Headquartered in Northfield, IL, Data Niche Associates is the leading provider of Medicaid and managed care rebate validation services to pharmaceutical manufacturers.  Database systems developed by DNA help clients assure integrity in the preparation, validation and payment of prescription drug rebates, as well as verify market share figures based on contractual agreements.